Apple to forge alliance with HCL Info for greater retail presence

An industry executive said HCL’s appointment will help iPhones and iPads reach smaller towns, which Apple has identified as next growth driverWritankar Mukherjee | ET Bureau | July 18, 2017, 09:02 IST

Apple is close to signing a deal with Shiv Nadar’s HCL Infosystems to forge a distribution partnership to expand its presence in brick and-mortar retail space, particularly in smaller towns, three senior industry executives said.

The deal is likely to be signed this week and the business may take off next month, they said. HCL has a strong presence in distribution, handling mobile phones of Lenovo, Motorola and Nokia among others, Braun’s electric personal gadgets, and Panasonic’s entire range, covering more than 13,000 retail outlets, including neighbourhood mobile phone stores in smaller markets.

An industry executive said HCL’s appointment will help iPhones and iPads reach smaller towns, which Apple has identified as next growth driver. “Around 55% sales of iPhones is from online in India,” the person said.

“Apple wants to focus equally on offline trade since it can expand the reach of the brand into several smaller markets where HCL will play a key role. Beyond that it is unlikely the company will want its distributor to influence pricing,” he said.

In an email response to ET’s queries, an HCL Infosystems spokesperson said: “We do not, as a policy, comment on market speculation.”

An Apple India spokesperson, too, said the company does not comment on speculation. Besides taking iPhones to smaller towns, HCL is also expected to help bring about a wholesale pricing parity which is currently not there, said the executives cited earlier.

In fact, Apple had expressed its inability to control prices since rules do not allow a manufacturer in India to do that except specify a product’s maximum retail price (MRP).

Apple currently distributes its products through four partners in India — Ingram Micro, Redington, Rashi Peripherals and Beetel Teletech which is a company of US mobile distributor Brightstar.

“Apple’s two distributors — Ingram Micro and Brightstar — are global firms and they too follow the same philosophy of the brand on pricing,” said the chief executive of a leading cellphone retail chain.